4% Rule Calculator

Q: Where does the 4% rule come from?

William Bengen's 1994 analysis found about 4% was the historical safe initial withdrawal rate; the 1998 Trinity Study (Cooley, Hubbard, Walz, AAII Journal) extended the evidence across allocations and horizons.

Q: Is 4% still safe?

It is a reasonable starting point for a 30-year U.S.-asset retirement, but many planners suggest a lower rate (3-3.5%) for longer horizons, higher fees, or earlier retirement. It is a planning guide, not a promise.

Estimate the portfolio you need to support your retirement spending with the 4% rule.

With $50,000 of annual retirement spending and a 4% withdrawal rate, you need about $1,250,000 — that is 25× your annual spending. Withdraw 4% in year one and adjust that dollar amount for inflation each year. Try 3% or 5% to see how conservative or aggressive that plan is.

Your plan

Calculations run in your browser. Inputs are not stored.

Annual retirement spending

What you expect to spend each year once retired.

Safe withdrawal rate

Presets are illustrative. Edit the rate to match your own assumption.

Retirement number — portfolio you need

4% withdrawal rate • 25.0× annual spending

Multiple of annual spending–

Monthly spending in year one–

Safe withdrawal rate–

What each rate requires

Withdrawal rate	Portfolio needed
3% (33.3×)	–
4% (25×)	–
5% (20×)	–

A "safer" rate means a much larger nest egg. The rate you choose changes the target dramatically.

How this calculation works

The retirement number

The 4% rule is a retirement shorthand: save roughly 25× your annual spending, withdraw 4% in the first year, and adjust that dollar amount for inflation each year.

Retirement number = annual retirement spending ÷ safe withdrawal rate

At a 4% withdrawal rate that is 25× annual spending. For $50,000 a year, you need $1,250,000.

Retirement number by spending and withdrawal rate

Annual spending	3% (33.3×)	4% (25×)	5% (20×)
$36,000	$1,200,000	$900,000	$720,000
$40,000	$1,333,333	$1,000,000	$800,000
$50,000	$1,666,667	$1,250,000	$1,000,000
$60,000	$2,000,000	$1,500,000	$1,200,000
$75,000	$2,500,000	$1,875,000	$1,500,000

Where the 4% comes from

Financial planner William Bengen's 1994 analysis found a ~4% initial withdrawal rate survived all historical 30-year periods in U.S. data. The 1998 Trinity Study (Cooley, Hubbard and Walz) confirmed similar results across allocations and horizons. The rule is a historical survival test, not a guarantee.

Assumptions

Retirement number = annual spending ÷ safe withdrawal rate.
4% ≈ 25× annual spending; 3% ≈ 33.3×; 5% ≈ 20×.
No inflation detail beyond the rule's built-in inflation-adjusted withdrawal assumption.
No taxes, fees, Social Security or portfolio income are included.
This is a back-of-envelope planning number, not a spending plan or advice.

View the formula →

Educational purposes only. Not financial advice. See the full methodology and disclaimer.

The 4% rule, explained

What is the 4% rule?

Withdraw 4% of your portfolio in the first year of retirement, then increase that dollar amount by inflation each year. The rule historically survived all 30-year U.S. periods tested.

Where does the 4% rule come from?

William Bengen's 1994 analysis found ~4% was the historical safe initial withdrawal rate; the 1998 Trinity Study (Cooley, Hubbard, Walz, AAII Journal) extended the evidence across allocations and horizons.

Is 4% still safe?

It's a reasonable starting point for a 30-year U.S.-asset retirement, but many planners suggest a lower rate (3–3.5%) for longer horizons, higher fees, or earlier retirement. It's a planning guide, not a promise.

How do I use the calculator?

Enter your expected annual spending in retirement. The calculator divides it by your chosen withdrawal rate to show the portfolio you'd need (e.g., $50,000 ÷ 4% = $1,250,000).

What does the 4% rule not account for?

The historical basis assumes a 30-year horizon, U.S. assets, inflation-adjusted withdrawals, and mostly ignores taxes and fees. Sequence-of-returns risk, high fees, and longer horizons can each break the rule's assumptions.